I found an interesting dataset from Economic Research at the Federal Reserve Bank of St. Louis (known as FRED) while I was reading an article via Bloomberg on cities in the US and Canada that can be considered as viable candidates for Amazon’s second headquarters. The author of the article eliminates a number of key US cities like Pittsburgh and Chicago as candidates due to stagnant labour markets and poor fiscal conditions. Poor fiscal conditions in US cities/states (e.g., California and New Jersey) are not a big surprise to me as this has been a known concern for many years; but, stagnant labour markets in cities like Chicago and Pittsburgh? That took me by surprise! …even though the population of Chicago for example has barely grown in over 20 years, which influences labour force/market size.
Here is what Chicago’s Labour Force looks like since 1990 –
And here is what Pittsburgh’s Labour Force looks like since 1990 –
Both cities display fairly similar broader labour trends, with rapid labour force growth during the 1990s, followed by very little (if any) growth since the early 2000s.
New York on the other hand has experienced almost consistent growth of its labour force since the mid 1990s (but barely any growth during the early 1990s) –
San Francisco and San Jose show interesting trends – clearly influenced by the Dot-Com Bubble, with each experiencing a severely shrinking labour force during the early 2000s –
Major Texan cities (i.e., Dallas-Fort Worth, Houston, San Antonio and Austin) all display consistent labour force growth throughout the entire period of study (since 1990). Shown below is Houston* –
* I’ve only chosen to show Houston because all the other major Texan cities display an almost identical rate of growth since 1990
And the chart below shows annual change in the labour force since 1990 for major US cities (the Labour Force in the USA has grown from about 125M to 160M between January 1990 and August 2017; at about 1% per year) –
What is clear from the chart above is that the more established cities like New York, Boston, Los Angeles, Chicago and Philadelphia have all experienced the slowest annual labour force growth since January 1990. In contrast are the rapidly growing sunbelt cities such as Phoenix, Nashville, Miami, Atlanta, and almost every Texan city.
Labour force/market information provides a good indication of how attractive a particular place is to potential workers. The real question now is – which US cities will lead labour force growth in the next 30 years? Will it be the superstar cities like New York and San Francisco? Or could it be the mid-sized “18-hour” city, like Nashville or Denver? Or will the sunbelt cities continue to dominate in growth? I have no clue. But I can guarantee you Amazon is very interested in this as it will influence the location of its second headquarters.